Stamp Duty – Purchasers Mid Transaction Breathe a Sigh of Relief

Legal

The Minister for Finance has included transitional measures in the Finance Bill 2017 providing mid transaction stamp duty relief for certain purchasers.

What is the new rate of stamp duty for commercial property transactions?

The Finance Bill 2017 increases the rate of stamp duty for conveyances and transfers of non-residential property from 2% to 6%.

From when does this rate apply?

The higher rate of stamp duty of 6% is effective from 11 October 2017.

Are there any transitional arrangements to cover ongoing transactions?

Yes, the Finance Bill 2017 announced transitional measures providing stamp duty relief for certain purchasers of commercial property who were mid transaction as at 11 October 2017. Purchasers benefitting from the transitional arrangements will not have to pay the higher rate of stamp duty even though their transactions completed/ will be completing after the effective date of 11 October 2017.

What are the transitional arrangements?

The transitional arrangements allow certain purchasers to avail of the lower 2% rate of stamp duty. Purchasers with binding contracts in place before 11 October 2017 may avail of the transitional arrangements provided that the instrument of transfer:

is executed before 1 January 2018; and

contains a statement, in such form as Revenue may specify, certifying that the instrument was executed solely in pursuance of a binding contract entered into before 11 October 2017.

The Finance Bill 2017 provides that it is an offence under the Taxes Consolidation Act 1997 to provide an incorrect statement.

These transitional measures will be welcomed by purchasers keen to avail of the lower stamp duty rate in respect of commercial property they are already in the process of acquiring. Please click here for more information on the key measures from a tax perspective in Budget 2018.